The growth rate of Quebec’s economy in 2012 is lower than expected, with real GDP growth of 0.9%, compared to 1.5% as projected in last year’s Budget. This slower pace of growth was primarily due to a decrease in consumption and a sluggish growth in exports. The second round of QST increases at the beginning of 2012 and fragile consumer confidence, as a result of the global economic uncertainty, also curtailed consumption in Quebec. The outlook for the coming years is more optimistic due to a strengthening U.S. economy and expectations of an overall improvement in global economic conditions, with Quebec’s economy projected to grow at 1.5% and 2.0% in 2013 and 2014 respectively.
Quebec’s fiscal policy continues to target a balanced budget in 2013-2014 as well as the debt reduction objectives for 2025-2026. This will be achieved by stricter controls over departmental spending as well as reductions in spending by public bodies. Furthermore, the Budget includes certain actions to promote private investment, including the introduction of a new tax holiday for investments and the creation of the Banque de developpement économique du Quebec to better support Quebec businesses.